Dayton Soapmaker Revamps Operation

 

This article appeared in the Dayton Daily News on October 14, 1984

 Dayton soapmaker revamps operation
Hewitt Soap Co. trims fat from production in survival bid
By MIKE SEEMUTH

 

Highlights of 1stcentury

1884– The business is founded in Dayton by two brothers, Archie and George Hewitt, and Henry Roever.  It operates a plant at 116 E. Sixth St. under the name Hewitt Roever & Co., Proprietors of the Dayton Soap Works.

1889 – The name of the business is changed to Hewitt Brothers Soap Manufacturers.

1916-1919 – The manufacturing plant is moved to 415 Linden Ave.  James M. Hewitt, son Archie, takes over management.

1932 – Procter & Gamble Co. purchases the company and incorporates it under the name Hewitt Soap Co.

1945 – Hewitt purchases a plant at 333 Linden Ave, its current location, from United Aircraft Products, Inc. of Dayton.

1978– Hewitt’s hourly employees join the International Union of Electrical Workers and scrap an independent union started in 1938.

1980 – Procter and Gamble sells Hewitt to American Safety Razor Inc. of Staunton, Va.

1981– American Safety Razor buys Duveen Soap Co. of Brooklyn, N.Y. to increase its presence in the soap industry.

1984– Duveen’s operations are moved from Brooklyn and consolidated with Hewitt’s operations in Dayton.

 

     Hewitt Soap Co. has grabbed a big share of the national market for high-priced cosmetic soap.  But the company’s bubble might burst if it doesn’t cut production costs and move into lower-price soap markets.  About 350 local jobs are at stake.
     The Dayton company is one of the nation’s largest private-label producers of cosmetic soap. The high-quality soap produced at its fragrant East Dayton plant is sold under such brand names as Revlon, Clinique, Estee Lauder and Aramis.
     “If it (Hewitt) isn’t the biggest, it’s very close to being the biggest in that field,” says Theodore Brenner, president of the Soap and Detergent Association, a trade group based in New York City.  “ They are a very reputable, old-line company.”
     But the 100-year-old Dayton company has been losing ground.  “Our total sales revenue has been on a decline since 1979,” says Gerald Harte, president of Hewitt.   “Our principal problem is cost.  It’s just too high. . .”
     AN INTENSIVE study of the company’s soap-making operation – which included video-taping production lines – turned up a bunch of costly habits.  Among them: Hewitt produces too much scrap, carries too much inventory, and spends too much time switching from one production job to another.
     “The next six months are going to be critical for us,” Harte says.
     He says Hewitt’s corporate parent, American Safety Razor, will put the soap company up for sale if the cost-cutting program doesn’t produce big savings in six months -- and if American Safety Razor can’t find a buyer, it will sell off the company in pieces and put its 350 employees out of work.
     “They’re looking at us very closely and wouldn’t hesitate twice to divest us,” says Mike Pratt, president of Local 689 of the International Union of Electrical Workers, which represents Hewitt’s hourly work force.
     BUT PRATT says the workers support the cost-cutting campaign -- even though it might mean eliminating some jobs -- because it will help Hewitt expand in markets where price competition is tough.
     A competitor estimates that Hewitt’s annual sales are $25 million to $30 million.  “They are a very, very good company,” says Edward Layne, executive vice president of Original Bradford Soap Works – A Rhode Island company that is Hewitt’s main competitor in the cosmetic soap market.
     Hewitt doesn’t compete head-on with Procter & Gamble, Lever Brothers, Armour Dial or other industry giants that sell such familiar brands as Ivory, Dial and Lifebuoy.
     HEWITT SELLS soap to cosmetic companies, which in turn, add their brand names and sell the soap in department stores at retail prices ranging up to $10 a bar.  The giants cater to the mass market, selling more cheaply made soaps in supermarkets and discount drug stores for less that $1 a bar.
     Although cosmetic soap is Hewitt’s biggest business, the mass market appeals to Hewitt because the cosmetic soap market isn’t growing.  “The market is pretty flat….We don’t look for growth there,” Harte says.
     Hewitt has tested the water by making private-label soaps that look like Ivory and other national brands.
     “It’s in its infancy stage now, but it could potentially grow to be the largest of our businesses,” Harte says.
     The hotel market is also appealing.  The company now sells soap to luxury hotels including the Waldorf-Astoria in New York and the Watergate in Washington.  Hewitt also wants to break in to the “deluxe” hotel market — considered a step below the “luxury” market because it is 10 times larger, Harte says.
     BUT HEWITT isn’t lean enough now to take business away from the low-cost soap producers that supply deluxe hotels, supermarkets and discount drug stores.
     One big cost – frequent switches from one production job to another – comes with the territory because Hewitt makes a lot of different soaps for a lot of different cosmetic companies. .  “A great deal of time is wasted,” Harte says.  “We want to reduce our changeover costs by 75 percent.” 
     Inventory is another target.  The company will cut inventory carrying costs by taking raw materials and finished goods out of a lease warehouse in Moraine and storing them in a smaller space at its East Dayton plant.
     THAT SHOULD cause a beneficial chain reaction at the plant.  Storing inventory at the plant, for example, will reduce the space available for huge quantities of scrap – forcing Hewitt to waste less raw material.